news

green firms 'fare better'

Further evidence of a positive link between shareholder value
and sound environmental performance has been furnished by a new study
from the international conservation organization WWF.

A
research report from WWF’s Forest for Life Campaign claims to have
shown a ‘positive correlation’ between stock market returns in a
specific industry sector and superior environmental standards.

In a comparison of eight forestry product companies operating in
Scandinavia, it found those that conformed to Forest Stewardship
Council (FSC) certification levels managed to achieve a 62 per cent
greater investment return between 1994 and 1998. This figure is based
on the finding that FSC-certified companies achieved a total investment
return of 6200 basis points more than their non-certified counterparts.

Forestry products last year accounted for 15 per cent of Sweden’s
annual exports and 22 per cent of Finland’s, according to national
statistics.

WWF cautions that the results are ‘not
conclusive’ because other factors may have played a role and the sample
was small, but says the figures ‘give an indication that companies
adopting progressive and environmental standards tend to perform well
in the financial market.’

The study, Sustainable
forestry pays, has been produced as part of WWF’s Global Forestry and
Finance Initiative, which seeks to influence institutional investors to
invest in forestry products companies with good environmental
performance. WWF is calling on pension funds to use FSC certification
as one of their criteria when making investment decisions.

WWF chief executive Robert Napier said the new evidence ‘suggests that
the benefits of certification include product differentiation, price
premiums and improved forest productivity’. He argued that although it
was initially more costly to improve environmental performance, costs
decreased quickly, leaving the company in a competitive long term
position.